Question: 1. [E points} Harry Potter has {BED-Eli) in cash that he deposits in his checking account at Griugotts Bank. i1. h. E. Has the amount

1. [E points} Harry Potter has {BED-Eli) in cash that he deposits in his checking account at Griugotts Bank. i1. h. E. Has the amount of reserves in the banking system changed? If so, by how much and in what direction? Explain your answer. At this point {with no other transactions} has the money supply changed? If so by how much and in what direction? Explain your answer. The bank's desired reserve ratio is Ill and, before Harry's deposit, Gringotts' reserves were at the desired leveL Henniooe Granger has applied to Gringotis for a loan. How much does Gringos want to lend to Hermione? Explain your answer. Afton Gringotts makes the loan to Hermione you described in part c, how much has the money supply increased due to Harry's deposit? Explain. 1inti'hat is the maximum amount of bank deposits that can he supported by the reserves Harry provided to the banking system, given Gringotts' desired reserve ratio? Show your work and explain your

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